Ecuadorian Problems

by | Jan 18, 2008 | Archives

Ecuadorian problems are being touted in much of the press. 


One reader wrote says:


“Good Morning, Gary , Knowing how busy you are, I hesitate to ask you to read this report, however, some of these Google alerts are worth the time.  The fourth and last one entitled ‘Ecuadorians Doubtful’ regarding a recent poll caught my eye.  If it came from Fox News I would not send it, however, this is an interesting site.  We both know that polls can be made to say just about anything depending on how the questions are phrased!  Thank you.”


“Adults in Ecuador have become more skeptical about their Constituent Assembly, according to a poll by Cedatos/Gallup. 43 per cent of respondents approve of the ad-hoc legislative body’s performance, down 19 points since November.


“Rafael Correa, a former finance minister, ran for president as an independent leftist under the Alliance Country (AP) banner. In November 2006, Correa defeated Álvaro Noboa of the conservative Institutional Renewal Party of National Action (PRIAN) in a run-off with 56.69 per cent of the vote. He officially took over as Ecuador ’s head of state in January and vowed to change the country’s Constitution. Correa’s party nominated no candidates to the National Congress.


“In April 2007, Ecuadorian citizens participated in a referendum to enact a Constituent Assembly. The president’s proposal was backed by 82 per cent of all voters. In September, Correa’s supporters—running under the Movement Country (MP) banner—secured 80 seats in the 130-member Constituent Assembly, enough to enact changes without seeking compromises with political opponents.


“On Nov. 29, Ecuador ’s Constituent Assembly officially began its work, and suspended the National Congress. The ad-hoc legislative body has six months to finish a draft. The proposed Constitution must be ratified in a nationwide referendum. The Constituent Assembly is expected to discuss a wide variety of topics, including the possibility of consecutive presidential re-election, as well as new oil and mining regulations.


“On Dec. 28, the Constituent Assembly passed a new fiscal reform package. The proposal—which is expected to generate roughly $300 million U.S. a year for the government—sets new guidelines in areas such as inheritance and the exploitation of natural resources. On that same day, Correa issued a warning to business leaders, saying, ‘We will respond firmly to the speculators who want to destabilize a democratic government.’”


I think that the article is correct. My feeling is from talking to many people here that they are losing confidence in Correa.  We should not surprised because the political history for the entire time Merri and I have been here is of presidential candidates promising too much and getting tossed (in part because of broken promises) a year or two after getting into office.


However my feeling is still that Correa is a good man trying to correct steps.


A recent article written by Greg Palast reinforces this feel about Correa.   Palast, an American by birth is a New York Times-bestselling author who moved to England and became an investigative journalist for the British Broadcasting Corporation as well as British newspapers.  He wrote:


“At the end of our formal interview, through a doorway surrounded by paintings of the pale plutocrats who once ruled this difficult land, he took me into his own Oval Office. I asked him about an odd-looking framed note he had on the wall. It was, he said, from his daughter and her grade school class at Christmas time. He translated for me. ‘We are writing to remind you that in Ecuador there are a lot of very poor children in the streets and we ask you please to help these children who are cold almost every night.’


“Doctor Correa, I should say, with a Ph.D in economics earned in Europe . Professor Correa as he is officially called – who, until not long ago, taught at the University of Illinois .  And Professor Doctor Correa is one tough character. He told George Bush to take the US military base and stick it where the equatorial sun don’t shine. He told the International Monetary Fund and the World Bank, which held Ecuador ‘s finances by the throat, to go to hell. He ripped up the “agreements” which his predecessors had signed at financial gun point. He told the Miami bond vultures that were charging Ecuador usurious interest, to eat their bonds. He said ‘We are not going to pay off this debt with the hunger of our people. Food first, interest later. Much later. And he meant it.’”


Palast then goes on to tell how Correa established a fund for the Ecuadorian refugees in America – to give them loans to return to Ecuador and how he kicked US oil giant Occidental Petroleum out of the country and is fighting oil and mining companies that pollute Ecuador .


Palast wrote: “This is hard core. No one – NO ONE – has made such a threat to Bush and Big Oil and lived to carry it out.  Maybe we can take some guidance from this tiny nation at the center of the earth. I listened back through my talk with President Correa. And I can assure his daughter that she didn’t have to worry that her dad would forget about “the poor children who are cold” on the streets of Quito . Because the Professor Doctor is still one of them.”


I have written some pretty positive comments about Correa before and stick to my guns. I believe he is trying to make huge changes that will help equalize wealth in Ecuador .


Whether he can accomplish it or not is another question. I hope so…but we’ll have to wait and see.  Right now the natives may be getting restless and this will not make Correa’s job easier…though this restlessness should not be unexpected.  The disparity between the rich and the poor has been huge and for far too long.  That’s one reason why Merri and I are here to spend and to invest. 


The upside to this is that the political uncertainty keeps prices down, values high and daily life seems unaffected making this a great, low cost paradise in which to live.


Until next message, I hope where you live is a paradise as well.